Alternatives Outlook 2024 Report

RENEWABLES

Australia has an ambitious target to increase the renewable sector’s share of electricity generation from 32% in 2022 to 82% in 2030. To achieve this ambitious target, ongoing investment into renewables projects is paramount. However, investment into renewable energy projects declined significantly in 2023 due to capital market turbulence and also sector specific challenges such as weakened Power Purchase Agreements (PPA) and some short term underperformance across solar and wind projects. The Clean Energy Council reported that 2023 the recorded since the council began tracking data in 2017. Despite this, several key deals occurred, driven by investor motivations such as ESG and offset mandates. An example of this is Ingka Group’s (IKEA’s parent company) acquisition of a 15% interest in TagEnergy’s Golden Plains wind farm as part of Ingka’s strategy to become climate positive by 2030 and net-zero by 2050. lowest year for large-scale (institutional) renewable energy generation investment

renewable energy strategy will be crucial to regaining momentum in investment activity as Australia competes for capital against countries with more mature renewable sectors. Cushman & Wakefield anticipates new-project commitment to be most active in the wind and clean fuel sectors. While there remains attractive development opportunities in the large-scale solar sector on a case-by-case basis, the rise of small-scale solar continues to affect large-scale solar investor demand. Additionally, Australia's green hydrogen and ammonia industry is rapidly growing, driven by abundant wind power resources and global demand for low-carbon fuels. With support from favorable policies and significant investments, Australia is poised to lead in clean fuel production and exportation. This industry offers significant economic opportunity, contributes to decarbonisation goals and positions Australia strategically in the Asia-Pacific region as a key renewable energy market. As investment and infrastructure continue to expand, early-stage opportunities are expected to rise in the next 24 months, driving Australia's transition to a sustainable, low-carbon future.

KEY TRANSACTIONS

Size AUD

Buyer/ Investor

Type

Name

Yield

Date

TagEnergy Golden Plains Wind Farm (15%)

Ingka Investments

Direct

300m -

Feb-23

Beijing Energy International Australia (BJEI)

Lightsource bp (5 projects)

Direct

813m -

Dec-23

Going forward, continuous and active government commitment to Australia’s

Sector size estimate: AUD 27 billion Prime discount rates: 7.50%-8.00%

| AUSTRALIA ALTERNATIVES 21

CUSHMAN & WAKEFIELD